The SAF project’s approval “really highlights the fact that these clean-energy investments are so important for rural communities, especially when we’re talking about clean fuels,” said Alexander Laska, the deputy director for transportation and innovation at Third Way, a center-left think tank.
Still, “there was really no need to hold this up in the first place,” Laska added, noting that all the loans and loan guarantees that the Biden administration finalized underwent months of negotiations and due diligence. “A lot of work went into making sure that these were projects that would advance American interests in energy independence, in energy abundance, and job creation,” he said by phone.
Does SAF still have a safe flight path?
Both the Montana refinery and the South Dakota SAF project are part of a largely bipartisan effort to boost America’s output of sustainable aviation fuel.
Air travel accounts for about 3.3% of the country’s total carbon dioxide emissions every year. To reduce emissions from burning fossil jet fuel, the Biden administration previously set a goal of increasing domestic SAF production to 3 billion gallons per year by 2030. That’s more than 100 times the amount of SAF that U.S. airlines consumed in 2023.
Replacing petroleum-based jet fuel with low-carbon alternatives would also slash emissions of toxic air pollutants, particularly within communities near airports, according to a new report from Third Way.
Yet even as momentum builds for alternative jet fuels, the question of what counts as “sustainable” — and whether feedstocks like corn ethanol or the Montana project’s vegetable oil should play a role — remains hotly disputed among climate and energy experts.
Those who say yes to turning crops into fuel claim that it can support economic development and create jobs in rural areas. But critics say certain biofuels can be just as carbon-intensive as fossil jet fuel and have unwanted side effects. The World Resources Institute has cautioned that diverting soybeans and corn from food and animal-feed markets can drive up food prices, cause deforestation, and increase emissions from land-use change.
Other approaches for making SAF include using algae, landfill waste, and discarded biomass such as sawdust from lumber mills or corn stalks and leaves left over after harvest. Very little, if any, jet fuel is made this way today. Synthetic fuels made from hydrogen and carbon dioxide could ultimately offer the deepest emissions reductions. But the technology for making so-called e-fuels remains highly expensive, energy-intensive, and unproven at large scale.
Instead, virtually all the world’s SAF supply resembles what’s produced at the Montana refinery. The particular biofuel type, known as hydroprocessed esters and fatty acids, can be derived from not only virgin vegetable oils like canola, mustard, and soybean but also used cooking oil and beef tallow.
No matter how the fuel is made, the emerging SAF industry is likely to face ongoing turbulence, even with the approval of Montana Renewables’ loan guarantee.
The Trump administration continues to stymie climate funding that Congress approved through the Inflation Reduction Act and bipartisan infrastructure law — including hundreds of millions of dollars in grants and research funding for SAF production. Biofuels producers are also waiting anxiously to see whether the crucial 45Z Clean Fuel Production tax credit survives a push by congressional Republicans to slash spending as they try to pass a budget. Their proposal calls for about $4.5 trillion in tax cuts over the next 10 years.
Building a domestic SAF industry “is going to take continued policy support,” Laska said. “We want to make sure that we are protecting the policies that are already on the books to make sure we’re able to unlock the full benefits of that transition.”
